Computer comes to H&S;

Page 1

The
Computer
Comes to
H&S
People say we are witnessing a revolution and that elec­tronic
computers are its agents.
We read about it in the news almost every day. Last
winter C. P. Snow, the British scientist and author, told
Congress that "This is going to be the biggest techno­logical
revolution men have ever known and far more
intimate in the tone of our daily lives." As if to bear out
his prediction, Look reports that last year 100,000 col­lege
boys and girls contracted with computer centers
for the names of compatible dates. "Please do not fold,
bend or spindle my date," pleaded one in his applica­tion.
Could it be that by 1984 mothers will be asking
their daughters, "How come you're still single? Don't
you know any nice computers?"
It's easy to confuse this revolution with the computer
itself. The Industrial Revolution is often thought to have
been started by the steam engine, but the real revolu­tion
was what the engine did to society. The true par­tisans
in a revolution of this kind are the people who
figure out how to apply the invention—the steam engine
or the computer.
People in H&S are partisans in the computer revolu­tion
and some of them are in its forefront. In the mid
1950's the Firm published two introductory booklets
on electronic data processing (EDP). They are still basic
in today's literature and in demand by clients and teach­ers.
One of them is sufficiently well thought of to have
been made part of a new EDP course for the American
Institute of CPAs. Last year the Firm published "In­ternal
Control in Electronic Accounting Systems," which
was made part of our own revised EDP home-study
course. Nearly 500 of our accountants have completed
our course or are now hard at work on its assignments.
A number of our offices have been using EDP on audit
engagements for some ten years, and last autumn we
stepped up its use substantially throughout the Firm.
The Executive Office prepared computer programs
which are proving highly effective for auditing clients
whose records are stored on computer tapes or cards.
Indoctrination meetings were held in New York to show
auditors from our offices how to use them. Already the
Cincinnati Office has been able to do an audit test on
employee records for one large client in 20 minutes
that took 13 hours the year before. On another engage­ment
it saved a hundred hours once needed to examine
vouchers. The New York Office showed a client how to
examine securities worth $1.2 billion by using a com­puter
to select a sample of only 2,500 of 17,500 items
and still maintain the remarkably tight precision limit
of eight hundredths of one per cent. The sample had
been 6,500 items without the program. Managements
of these clients were impressed with what we could do,
and those on the staff who used the programs are look­ing
forward to the next developments.
All of this means that computers are by no means
the exclusive domain of our Management Advisory
Services group, although they do spend a lot of time with
computers. In tax work, too, a number of offices are
experimenting with a computer service which enters
tax data on tax returns, performs the necessary calcu­lations,
and sends the returns back in printed form.
H&S the First to Automate
Haskins & Sells became the first of the large account­ing
firms to automate its own bookkeeping when back
in 1952 we installed a punched-card system to process
the unbilled service charges of all our offices. Adjusting
to modernization at that time was good experience for
solving the more complex task that confronted us a
decade later, when it became clear that our punched-card
system, based on four IBM 407's and a battery of
supporting equipment, could no longer handle the in­creasing
load. Maintaining schedules for getting un­billed
charges out to our offices was requiring a lot of
overtime in the Financial Department. Every other
Friday night a four-man shift worked right through to
7 or 8 o'clock the next morning, when they were re­lieved
by the day shift that ran the machines all Satur­day.
Even then, some office reports were not getting
out until the following Monday or even Tuesday. A
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